Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Anchor Bancorp (Nasdaq: ANCB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- Powered by its strong earnings growth of 700.00% and other important driving factors, this stock has surged by 27.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- ANCHOR BANCORP/WA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANCHOR BANCORP/WA continued to lose money by earning -$0.11 versus -$0.70 in the prior year. This year, the market expects an improvement in earnings ($3.44 versus -$0.11).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 600.0% when compared to the same quarter one year prior, rising from $0.06 million to $0.39 million.
- The gross profit margin for ANCHOR BANCORP/WA is currently very high, coming in at 84.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.96% trails the industry average.
- ANCB, with its decline in revenue, slightly underperformed the industry average of 9.0%. Since the same quarter one year prior, revenues fell by 11.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.